How Much You Can Put Into Your 401(k) Each Year

Your annual contribution limit depends on your age and whether your employer plan is a traditional or Roth 401(k)

The IRS sets a maximum amount you can contribute to your 401(k) each year. For 2024, that limit is $23,500 if you are under age 50. If you are 50 or older, you can contribute an additional $7,500 per year, bringing your total to $31,000. These numbers change most years — the IRS adjusts them for inflation, usually announced in October for the following year.

Your employer may also contribute to your account through matching or profit-sharing. Those employer contributions count toward a separate, higher limit: $69,000 total per person in 2024 (or $76,500 if you are 50 or older). This combined limit includes both what you put in and what your employer puts in, so it is not an extra $69,000 on top of your $23,500.

The contribution limit applies to the calendar year, not your plan year. If your employer's plan year runs July to June, you still follow the calendar-year limit. Your paycheck deductions stop once you hit the annual maximum, even if your plan year continues.

Key Takeaways

• You can contribute up to $23,500 in 2024 if you are under 50, or $31,000 if you are 50 or older, and these limits increase most years with inflation.
• Your employer's contributions to your account count toward a higher combined limit of $69,000 (or $76,500 at age 50+), not in addition to your personal limit.
• The annual limit resets on January 1 each year, regardless of when your employer's plan year begins or ends.
• If you change jobs mid-year, your contributions to both employers' plans count toward the same annual limit, so you must track your total across all accounts.

How your paycheck contributions are limited

Your employer withholds 401(k) contributions from your paycheck before taxes are calculated. You tell your employer what percentage or dollar amount to deduct each pay period. The payroll system tracks your year-to-date contributions and stops deducting once you reach the annual limit.

If you are paid biweekly, dividing $23,500 by 26 pay periods gives you roughly $904 per paycheck. But you can contribute more in some pay periods and less in others — the limit is the annual total, not a per-paycheck cap. Some people front-load their contributions early in the year, while others spread them evenly across all 12 months.

Once you hit the limit, your employer stops deducting from your paycheck for the rest of that calendar year. Any employer match that would have gone to your account may also stop, depending on your plan's rules. Check your plan document or ask your benefits administrator whether matching continues after you max out.

What happens if you contribute too much

If you accidentally exceed the annual limit — usually by changing jobs and not tracking contributions across two employers — the IRS requires your plan to correct the overage. Your plan administrator will return the excess contributions to you, plus any earnings those excess dollars generated. You will owe income tax on the earnings portion, and the IRS may assess a 6% excise tax on the overage itself.

The correction process is called a corrective distribution. Your plan must identify the overage and send it back to you by a specific deadline, usually by April 15 of the following year. You will receive a Form 1099-R showing the amount returned, which you report on your tax return.

To avoid this, track your contributions if you work for more than one employer in the same year. If you change jobs in July, for example, add up what you contributed to your old employer's plan plus what you have contributed to your new employer's plan. If the total exceeds $23,500, tell your new employer's payroll department to stop deducting for the rest of the year.

Catch-up contributions at age 50 and beyond

The extra $7,500 you can contribute at age 50 is called a catch-up contribution. It is a separate allowance designed to help workers save more in the years before retirement. You do not have to ask permission — once you turn 50, your plan automatically allows the higher limit.

Some plans require you to update your contribution elections when you turn 50, while others do it automatically. Check with your benefits administrator or your plan's website to confirm your limit has increased. If you do not see the change reflected in your paycheck deductions, contact payroll to update your elections.

The catch-up amount also increases with inflation most years, though usually by smaller increments than the main limit. In 2024, the catch-up is $7,500; in 2023 it was $7,500 as well. The IRS announces any changes in October for the following year.

How employer contributions affect your limit

Your employer's contributions — whether matching, profit-sharing, or discretionary — count toward the combined $69,000 limit (or $76,500 at age 50+). This means your personal contributions plus your employer's contributions cannot exceed that total in a single year.

For example, if you contribute $23,500 and your employer contributes $10,000 in matching funds, your combined total is $33,500. You are well under the $69,000 combined limit, so there is no problem. But if you are a highly compensated employee or a business owner with a large profit-sharing contribution, you could theoretically hit the combined limit even if you have not maxed out your personal $23,500.

Your plan administrator is responsible for monitoring the combined limit and stopping contributions if necessary. Most plans will not allow you to contribute more than $23,500 personally, so the combined limit rarely affects rank-and-file employees. It matters more for self-employed people and owners of small businesses who can contribute both as an employee and as an employer.

Contributing to multiple 401(k) plans in one year

If you work for two employers in the same calendar year, your contributions to both 401(k) plans count toward the same $23,500 limit. You cannot contribute $23,500 to each plan — your total across all plans cannot exceed $23,500 (or $31,000 if you are 50 or older).

This situation often arises when you change jobs mid-year. You might contribute $15,000 to your old employer's plan before leaving in June, then start contributing to your new employer's plan in July. You can only contribute $8,500 more to the new plan before hitting the annual limit.

The burden is on you to track this total. Your old employer and new employer do not communicate with each other about your contributions. If you do not tell your new employer how much you already contributed, they may deduct too much from your paycheck, triggering a corrective distribution and tax penalties. When you change jobs, ask your old employer for your year-to-date 401(k) contribution amount and provide it to your new employer's payroll department.

Roth 401(k) contributions and the same limits

If your employer offers a Roth 401(k) option, the contribution limits are identical to a traditional 401(k). You can contribute up to $23,500 in 2024 (or $31,000 at age 50+), and that limit applies whether you choose traditional, Roth, or a combination of both.

Some people split their contributions between traditional and Roth — for example, $12,000 to traditional and $11,500 to Roth. The combined total still cannot exceed $23,500. Your employer's matching contributions, if any, typically go into a traditional account even if you choose Roth for your own contributions, though this varies by plan.

The tax treatment differs between the two: traditional contributions reduce your taxable income in the year you make them, while Roth contributions are made with after-tax dollars. But the annual dollar limit is the same for both.

Frequently Asked Questions

Can I contribute more if I have a high income?

No. The annual contribution limit applies to everyone equally, regardless of salary. High earners cannot buy their way to a higher personal limit. However, if you are self-employed or a business owner, you can make additional contributions as an employer, which may allow you to save more overall within the combined $69,000 limit.

What if I max out my 401(k) in October?

Once you reach the annual limit, your employer stops deducting from your paycheck for the rest of that calendar year. You cannot contribute again until January 1 of the next year. Any employer match that would have gone to your account may also stop, depending on your plan's rules — ask your benefits administrator about this.

Do I need to do anything special to make catch-up contributions at 50?

Your plan should automatically allow the higher limit once you turn 50. Some plans update your elections automatically, while others require you to contact payroll or update your elections online. Check your plan's website or call your benefits administrator to confirm the change has taken effect.

If I leave my job, does my contribution limit reset?

No. Your annual limit is tied to the calendar year, not your employment. If you change jobs, your contributions to both employers' 401(k) plans count toward the same annual limit. You must track your total contributions across all plans to avoid exceeding the limit.

Can my employer contribute more than I do?

Yes. Your employer's contributions are separate from your personal limit. However, the combined total of your contributions plus your employer's contributions cannot exceed $69,000 in 2024 (or $76,500 at age 50+). For most employees, this combined limit is not a practical concern.